What Were the First Major Businesses in Israel?

The first pioneers to settle in the land known as Israel today were farmers—those who lived on a kibbutz, or a communal farm. Their goal was to transform the arid land so that they could support themselves and other Jewish migrants who were fleeing from the rising anti-Semitism and persecution, especially in Eastern Europe.

By the early 1900s, the kibbutzim were thriving from the hard work and devotion of the first pioneers. While the population of each kibbutz was relatively small—with hardly more than a few dozen members at each—more and more Jews trickled down from Eastern Europe to escape the growing anti-Semitism of Central and Eastern Europe.

Not all were penniless, and many had ideas of starting businesses in their new homes. Meanwhile, the land began to yield more and more crops. The arrival of the Jews brought the winds of change in the region, change that was primarily unwelcomed by others.

These were tumultuous times for Israel, as the land had only recently changed hands from the Ottoman Empire to the British following WWI. The British themselves had anti-Semites in their ranks, who feared that the creation of a Jewish state would push them out of power as well.

So, they divided the land amongst Jews and Arabs in hopes of creating a lasting peacekeeping mandate under British rule

A part of the mandate’s terms was to restrict the amount of land that could be purchased by Jews. They also set up countless obstacles to starting businesses, requiring all sorts of permits and special permissions to conduct operations.

Build Up, If Not Out

The mandate from the British didn’t stop anti-Semitism from growing in Eastern Europe—which continued to push Jews out of the area, well into the mid-20th century. As Zionism spread, it attracted more and more of Europe’s most brilliant minds, with one of them being Russian-born engineer, Moshe Novomeysky.

Moshe’s family came to Siberia after his grandfather was exiled from Poland for political dissent. Moshe worked as an engineer for the Russian works on Lake Baikal. Moshe had discovered Zionism while studying engineering abroad—around the same time, a fellow scientist introduced him to a German study about the chemical composition of the Dead Sea.

This study intrigued Moshe, and he began applying for permission to extract minerals from the Dead Sea.

Dedicated to the Dead Sea

Four years later, in 1911, Moshe finally got a chance to visit the Dead Sea for the first time. After conducting a series of experiments, he returned to Siberia. There he started a family, and then 9 years later moved them to Gedera, a town near Tel Aviv. At that time, the land was under the British-controlled Mandatory Palestine.

Moshe quickly purchased land and mining rights near Mount Sodom and began conducting geological surveys in partnership with British geologists. Petroleum oil was in high demand, and the gentlemen believed that Israel would have its sources of black gold, as it was known.

While Moshe and the geologists didn’t find oil, the Palestinian high commissioner was impressed by their efforts and granted permission for Moshe to continue his geological surveys and to conduct more experiments in the Dead Sea.

There was still plenty of excitement around the potential of oil, especially from investors in London. But as Moshe would discover, God hides treasures well in this world—so that only the most astute can find them.

When Dreams Evaporate… For the Better!

Moshe and his team quickly discovered that the real potential of the Dead Sea was in providing potash, or salt minerals typically used for fertilizer.

They started creating salt ponds, which are man-made devices that facilitate faster evaporation, so that water can be separated from salt and other precious minerals. Salt ponds can be as deep as two meters (about six feet) and produce tons of salt per day.

When the British caught wind of his discovery, debates flared up as to who should have the rights to mine. There were even American companies that had taken an interest in mining the Dead Sea. Ultimately, the high commissioner sided with Moshe, who had partnered with a Scottish businessman named Thomas Gregorie Tulloch—who had long been interested in mining the Dead Sea.

There were fierce debates in the British Parliament, and anti-Semites revealed their true colors. Many who did not support a Jewish state moved to prohibit Jewish people from starting any sort of business in the Middle East, but Moshe wouldn’t let that stop him. He met with all the Londoners he could, until he found people who would support him.

Although the British ultimately decided to prohibit Jews from buying or owning land in the area, they ultimately made an exception for Moshe and his company—provided that it would be under British control.

The British granted approval for Moshe’s company in 1930, called the Palestine Potash Company, with the agreement that the board of directors would oversee operations from London, while the services and laboratories would be in Jerusalem. Palestine Potash quickly turned a profit, even despite the German Potash Cartel’s efforts to sell potash at damagingly low prices.

From Palestine Potash to Dead Sea Works

The Dead Sea was split between Mandatory Palestine and Transjordan (known today as Jordan), which meant that Moshe was going to have to work with two governments. The sheer size of the salt ponds made it difficult to expand, because the British blocked Moshe from buying more land… but there was still plenty of work to be done with what he had.

Moshe’s company brought Jews from kibbutzim in the north, and Arabs from Transjordan together for work and profit. He became fluent in Arabic and was nicknamed “The Doctor” by the Transjordanian locals.

Many of the locals happily worked on the potash mines alongside Jews recruited from nearby kibbutzim. In the anti-Jewish riots of 1936-39, the kibbutzim that worked under Moshe Novomeysky were spared.

During World War II, Palestine Potash made up half of the country’s exports, and supplied the British army with a plethora of potash. The company would enjoy turning a profit for nearly another decade—until the outbreak of the Israeli War of Independence, changing everything.

The Transjordanian Army occupied the mines during the war, and all the machinery and buildings were looted or destroyed. When Israel emerged victoriously, they reclaimed the facilities, roads, and operations for the Israeli people.

The company was instrumental in helping the fledgling Israeli government establish control of what they had lost during the war, by giving them millions of dollars in loans to aid in the construction of roads in the area. In 1953, Palestine Potash became Dead Sea Works, an Israeli government corporation—which is now the world’s 4th largest potash producer.

The Future of Business in Israel

Today, Israel’s economy has diversified quite significantly, and continues to grow thanks to brilliant minds such as Moshe Novomeysky, and the people who partner with them. Have you ever considered partnering with Israel? With Israel’s economy on the rise and stabilizing, now may be a better time than ever.